Majority voting and the welfare implications of tax avoidance

• 成果类型: Article
• 署名作者: Traxler, Christian
• 署名单位: Max Planck Society
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2011.07.006
• 发表日期: 2012
• 页码: 1-9
• 关键词: Tax avoidance; welfare analysis; Majority Voting; Median voter equilibrium

摘要

A benchmark result in the political economy of taxation is that majority voting over a linear income tax schedule will result in an inefficiently high tax rate whenever the median voter has a below-average income. The present paper examines the role of tax avoidance for this welfare result. For a right-skewed distribution of taxed income, we show that the political distortion from majority voting is increasing in the median voter's avoidance. Vice versa, keeping the decisive voter's avoidance constant, the political inefficiency is decreasing in the average level of avoidance in the economy. (C) 2011 Elsevier B.V. All rights reserved.